According to Smart CEO, these are 5 Signs You Need a Cloud Accounting System

1. Too many manual processes
2. Inadequate reporting
3. Costly system maintenance
4. Integrating accounting with other business systems
5. Growth and change

What Vendor should I go with?

Top 3 on the Market – Xero, QuickBooks & Sage

• Xero considered the best on-line accounting system
• QuickBooks robust and positioned for small companies
• Sage solid control system, but weaker on reporting. 

Can’t Ignore – Zoho

• ZOHO Books part of a powerful suite of cloud applications.
• Understandable and simple pricing model.
• Strong functionality we would expect at this kind of application.
• Good for process integration – easily integrated with other ZOHO services

Up & Coming – ClearBooks

• Entry level – Positioned for small companies
• Price would be the only current motivator
• No outstanding features – Weak in the market
• However, young London Based PLC start-up
• Evidentially had unscheduled downtime

So how do I choose?

• Key Comparison Points & Selection Criteria
• Financial Stability of company
• Access to capital
• Fundamentals as standard
• Reporting Capabilities
• Project Management
• Integration with other Applications
• Security Standards
• Downtime – Five nines standard

How do I move this across my whole company’s infrastructure?

Well in the SaaS market they are called Apps and in the reports from Bain & Company and Gartner it’s called Infrastructure as a Service (IaaS)

It is safe to say that there are many alternatives and if you operate a Microsoft environment, you may be able to get a lot out of MSTeams, Sharepoint and the apps thsat integrate in that environment.

Looking at Zoho

A few key points to highlight:

• Cantered around CRM
• Born Integrated – Proprietary Apps
• Integration through Third Party Apps
• Complete Business Architecture Solution
• Apps available on Zoho App Marketplace  

Making it Happen:

1. There will be costs associated to each app
2. Time & effort is required for set-up
3. Time is required for on-going data quality management
4. On-going system management is improved due to Zoho “born integration”
5. Third Party Apps may be effected by Zoho System Updates

Looking at Xero

A few key points to highlight:

• Cantered around the Accounting Software
• Integration through Third Party Apps
• Decide on Business Priorities and Choose Specific Applications
• Apps available on Xero App Marketplace

Making it Happen:

1. There will be costs associated to each app
2. Time & effort is required for set-up
3. Time is required for on-going data quality management
4. Third Party Apps may be effected by Xero System Updates

A Final Though

This type of implementation typically works better when it is part of an overall plan & strategy.  As part of this process it is worth mapping out key processes within the business, thinking of the processes in a “lead to cash” sequence.  Finally, it is important that the team buys-in to the plan and will help make it successful.

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Introduction

If you are running your business, you have a fundamental responsibility to yourself, if no one else, to make it work.  Let’s face it, unless you are limitlessly wealthy; you need to make money.  So that is one reason you are doing it.  There could be others, but for now let’s just focus on the fundamental primary purpose of all businesses…

That’s right…

To make money!

So from a purely tactical perspective, you have to “make a number”.  So the first step is figuring out what is your goal; what’s the target.  So lets get tactical.  But lets stsart sat the begoinning of the Profit Through Control Process. That is to say, lets start with Sales.

In sales there is an old adage … Calls + Demos = Sales

Think of it like you are training to get fit. How many leads sare you getting? Are you turning them into meetings? What is your tatget for meetings each week? For example, do you hsve a goal of meeting 3 to 5 new people per weekl? How are you doing against that target?

Now follow the Key Contyrol Steps we discussed before.

Step 1

Statring with sales; when you look at your business, think in a process orientation starting with the customer through your organisation to the point where you deliver your product and service to the customer and get paid.

Now map that out.  No need to get fancy, use post it pads or something and get a “rough cut” of your key steps.

Step 2

Now think about each step in the process.  Let me use a simple example process.

1. Lead Generation
2. Sales or Closing Deals
3. Invoicing or Billing or Collecting Cash
4. Purchasing or Buying Stuff
5. Doing Things or Building Things or Holding Stock
6. Delivering Things

Step 3

Now that you have your key steps outlined ask yourself two questions:

1. What in these steps could I do better to enable me to get more customers?
2. What “clogs up” my money and keeps my money from getting into my pocket?

So for the first question it could be more leads or a better conversion rate in sales or spending less on overheads.  But don’t boil the ocean here! pick one!

Similarly for the second question it could be getting paid quicker.  The root cause of that problem could be getting your invoices out quicker or better credit control or different terms or better pricing.  Again only pick one!

Step 4

Limit yourself to 3 to 5 key areas to improve.  Measure them and be relentless at your pursuit of improvement!

When you’re done, circle back and do it again!                   

The post The Profit Equation appeared first on Pathway to Profit.

What is an in solvent Business?

In accounting, insolvency is the state of being unable to pay the debts, by a person or company (debtor), at maturity; those in a state of insolvency are said to be insolvent. There are two forms: cash-flow insolvency and balance-sheet insolvency.

Cash-flow or Trading insolvency is when a person or company has enough assets to pay what is owed, but does not have the appropriate form of payment. For example, a person may own a large house and a valuable car, but not have enough liquid assets to pay a debt when it falls due. Cash-flow insolvency can usually be resolved by negotiation. For example, the bill collector may wait until the car is sold and the debtor agrees to pay a penalty.

Balance-sheet insolvency is when a person or company does not have enough assets to pay all of their debts. The person or company might enter bankruptcy, but not necessarily. Once a loss is accepted by all parties, negotiation is often able to resolve the situation without bankruptcy. A company that is balance-sheet insolvent may still have enough cash to pay its next bill on time. However, most laws will not let the company pay that bill unless it will directly help all their creditors. For example, an insolvent farmer may be allowed to hire people to help harvest the crop, because not harvesting and selling the crop would be even worse for his creditors.

What Does It Mean to Perform Insolvent Trading?

Insolvent trading means trading while your company is suffering insolvency. Specifically, this refers to incurring new debt while your company is insolvent. As a director of a company, one of your main director duties is for your company not to engage in this practice. A director engages in insolvent trading if the following conditions occur:

• The person is a director while the company is insolvent.
• That when the debt is incurred the company is insolvent or would become insolvent.
• There are reasonable grounds for suspecting that the company is insolvent, or will become insolvent as a result of the debt.

If a director engages in insolvent trading then they become personally liable for the new debts that are incurred by the company. That means they are not protected by limited liability. Therefore, the director’s personal assets are used to pay the new debt obligations. This is particularly relevant if your company goes into liquidation or bankruptcy, after being insolvent.

What are my responsibilities as a Director?

It is always advisable to see an Insolvency Practitioner if you have any concerns, to ensure that you have specific advice on your specific situation.   These Guidance Notes are not designed to be all encompassing, but rather a general guide.

Given that the company is below the threshold, it is the Directors responsibility to assess “going-concern” questions. 

Specifically, THE DIRECTORS RESPONSIBILITIES OR QUESTIONS TO ASK ARE: –

When conducting their going concern assessment, the directors will have to evaluate which of three potential conclusions is appropriate to the circumstances of the company:

1. there are no material uncertainties that may cast significant doubt about the company’s ability to continue as a going concern
2. there are material uncertainties related to events or conditions that may cast significant doubt about the company’s ability to continue as a going concern but the going concern basis remains appropriate
3. the use of the going concern is not appropriate

The accounting standards require directors to make disclosures about the existence and the nature of material uncertainties that lead to significant doubts about going concern.

Final Though

If you are struggling or you have questions always seek help.  Speak to your accountant, solicitor and Insolvency Practitioner and people who are close to you.

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